The Private Prison Racket

In October, when California Governor Jerry Brown signed a new contract with Corrections Corporation of America, a Nashville-based private prison behemoth, onlookers might’ve wondered if he’d been following the news.

As inmate populations have soared over the last 30 years, private prisons have emerged as an appealing solution to cash-starved states. Privately run prisons are cheaper and can be set up much faster than those run by the government. Nearly a tenth of all U.S. prisoners are housed in private prisons, as are almost two-thirds of immigrants in detention centers—and the companies that run them have cashed in. CCA, the oldest and largest modern private prison company, took over its first facility in 1983. Now it’s a Wall Street darling with a market cap of nearly $3.8 billion. Similarly, GEO Group, the second largest private-prison operator, last week reported $1.52 billion in revenue for 2013.

But while privatizing prisons may appear at first glance like yet another example of how the free market beats the public sector, one need only look at CCA’s record in Idaho to wonder whether outsourcing this particular government function is such a good idea.

In July 2000, Idaho’s then-Governor Dirk Kempthorne made a decision similar to Jerry Brown’s. He opened the Idaho Correctional Center, the state’s first private prison. But it wasn’t long before the facility—built and operated by CCA—began to draw concerns. Prisoners in the 2,000-bed facility dubbed it “Gladiator School” for the rampant fighting that took place inside. A 2008 study by the Idaho Department of Corrections obtained by the American Civil Liberties Union showed that there were four times as many prisoner-on-prisoner assaults there than in all the state’s seven other prisons combined.

The ACLU sued CCA in 2010, alleging that violence had become an “epidemic” in the facility, and the Associated Press released a video showing a prisoner beaten unconscious while correctional officers stood around watching. A 2011 settlement required CCA to keep more officers on staff, but the company apparently didn’t bother to do that. Last year, a review of CCA’s staff records showed that prison employees had falsified as many as 4,800 hours over the course of seven months; they had understaffed the prison on purpose and fudged records. The end result: Idaho's private prison experiment with CCA will end in June.

CCA’s failure in Idaho is just one example of the industry’s spotty record. Another recent case study comes from the CCA-run Adams County Correctional Facility in Natchez, Mississippi. Last June, 20 prisoners were indicted in connection with a riot that left one man dead and dozens injured. According to a prisoner who called a Jackson, Miss. television news station, the riot was connected to prisoners’ protests for better “medical [care], programs, clothes,” and a modicum of “ respect from the officers and lieutenants.” And an FBI agent filed an affidavit supporting those claims.

Similar riots have broken out in private prisons run by CCA and other companies in Oklahoma, New Mexico, Florida and California. At least 10 deaths ( one from natural causes) occurred at CCA prisons in 2013 alone. There have also been allegations that CCA employees at a Texas prison that has since closed repeatedly denied basic medical care to prisoners who, in some cases, died from their untreated ailments. (The Texas Observerdescribed the story of a woman who bled for nine months during a one-year prison term because CCA employees declined to treat her for endometriosis and a retroverted uterus.)

Of course, government-run prisons aren’t without their share of troubles. But those troubles and lawsuits are easier to accept when the system behind those problems isn’t making billions on Wall Street. As The Weekput it last summer: “Private prisons ultimately pose a greater threat to inmates because of their raison d’être; they exist solely to make a profit off of incarcerated individuals.”

And then there are the political fiascoes.

Before Gov. Chris Christie was taking heat in New Jersey over supposed bridge traffic studies, he was under fire for his support and gushing praise for a private prison company—one he once worked for as a lobbyist—as “representing the very best of the human spirit.” That company, Community Education Centers, oversaw about 3,500 beds in large halfway houses throughout the state and was shown in a 2012 series of scathing New York Times investigative reports to be woefully unregulated, mismanaged and violent. The series described the facilities as “ hell on earth.”